A decade after its creation, the company that developed marketing technology Braze is preparing to begin an effort to transform into a publicly traded corporation.
Today the company based in New York has filed their form S-1 in the U.S. Securities and Exchange Commission to be listed on the Nasdaq exchange under the code “BRZE.” Braze is part of the expanding market of software for managing marketing campaigns businesses, a segment that research company IDC predicts could reach $15 billion in 2021 and $19.4 billion by 2024.
The company that provides customer engagement offers the technology to allow brands to communicate directly with customers through different channels. Through Braze’s platform, companies can utilize information from apps, emails, and other media to better understand their clients before contacting them with targeted messages. Brands well-known for using Braze to market their services include Burger King, Anthropologie, Birchbox, Grubhub, IBM, Hinge, Nascar, PayPal, HBO, iHeartRadio Sephora, Rosetta Stone.
According to the company’s SEC file, Braze reported enormous revenue growth over the last two years, with $150.2 million in the fiscal year 2021 and $96.4 million by 2020. Although the company has seen growth in 2021 and 2020, it’s still not making money. The net loss reached $31.43 Million in 2021. The exact amount was $31.36 million in 2020. Braze also announced that annual recurring revenue exceeded 200 million by 2021, up from the $100 million reported in 2019.
When Braze was founded in 2011 by the CEO Bill Magnuson, Jon Hyman, and Mark Ghermezian, it wanted to establish a mobile-first business, helping businesses adapt to evolving consumer habits. As of the time of publication, the company was not available to provide any information regarding the company’s IPO plans. However, in a note included within the S-1, Magnuson stated in the letter that his “goal was to build an organization that would capitalize on new technology to help the world’s best companies to grow by trusting us with their most valuable asset: their consumer relationships.”
“While technological change packs us forward, we knew that humanity should always guide us,” Magnuson wrote. “Great human connections are built on trust engaged communication, a shared experiences. Therefore, it’s no surprise that the key weapon of lasting, exceptional firms is the quality of their customer interaction.”
Over the past two years, Braze has expanded its customer base by 728 users in January 2020, to 890 in January 2021, and 1,119 by July 2021. Braze also continues to grow its cloud-based platform. It currently has 3.3 billion active monthly users on its applications, websites, and other online media. This increases to 2.3 billion as of January 2020 and 1.6 billion in January at the beginning of 2019.
Privacy issues are things Braze identified as a potential threat and cited federal, international, and state regulations. These include recently approved California, Virginia, and Colorado laws, such as Europe’s General Data Protection Regulation. The S-1 explains various rules and provides insight into how regulations regarding data privacy may affect the business legally & financially.
“The laws are not consistent, and consent in the event of a widespread data breach could be costly,” as per the SEC filing. “In In addition, although we limit in our contracts the kinds of data that our customers can use and store on the system, we do not completely be in control of those actions by our users. If customers fail to adhere to their contractual obligations, it can expose us to liability which means we could not possess enough recourse to pay for our obligations.”
Braze’s S-1 filing comes another day after the advertising tech company Basis Globally Technologies–formerly known as Centro–confidentially filed its S-1 with the SEC, further adding to the string of ad-tech and mar-tech IPO’s that have taken place this year. Companies that have gone public or started their IPO procedure in 2021 are content recommendations business Taboola and the advertising measurement firms DoubleVerify and Integral Ad Science, and other companies that offer marketing technology, like Zeta Global and Sprinklr.
In the last decade, Braze has raised $175.1 million following the Crunchbase database. The company raised $80 million in a Series E round, led by Meritech Capital Partners in 2018, only a year after introducing the $50 million of a Series D round, which ICONIQ Capital led. Other investors include Battery Ventures, InterWest Partners, Rally Ventures, and Blumberg Capital.
While Braze was expanding rapidly even before the Covid-19 outbreak began, the company claimed that the epidemic had increased mobile and digital use growth. Braze also believes in the increasing dependence on first-party data, particularly as companies discover ways to reach out to users who don’t have as much third-party aggregated data.
“Modern brands understand that when a customer is intermediated by a third-party aggregator, ad-platform or distribution channel, it’s not their customer relationship,” Magnuson wrote. “The higher value customer relationships are informed by first-party data and connect through direct engagement.”